509.02 Small Entity Status — Definitions
|
Section Frequency Chart
Certain fees shall be reduced by 50 percent with respect to their application, and to any independent inventor or nonprofit organization.
- If applicant qualifies as a small entity, applicant may also qualify for “Micro Entity Status”
The fees which are reduced by 50% for small entities include patent application filing fees including the basic filing fee, search fee, examination fee, application size fee, and excess claims fees, extension of time, revival, and appeal fees, patent issue fees, and maintenance fees on patents.
- Fees which are reduced by 50% effective March 19, 2013, but which were previously not reduced, include certain petition fees, the request for reexamination fees, the fee for submitting an information disclosure statement in certain time frames, the surcharge for reinstating an expired patent, and the fee for an unintentionally delayed claim for priority.
- Fees which are reduced by 50% effective January 1, 2014, but which were previously not reduced, are certain PCT international stage fees, including the transmittal fee, the search fee, and the preliminary examination fee.
Fees which are not reduced include document supply fees, certificate of correction fees, and miscellaneous fees and charges.
The filing fee charged shall be reduced by 75 percent with respect to its application to any small entity "if the application is filed by electronic means as prescribed by the Director".
- Therefore, the filing fee for a nonprovisional original utility application filed on or after December 8, 2004 by a small entity in compliance with the Office electronic filing system is reduced by 75 percent.
- The 75 percent reduction does not apply to design applications, plant applications, reissue applications, or provisional applications.
(a) Definition of small entities. A small entity as used in this chapter means any party (person, small business concern, or nonprofit organization) under paragraphs (a)(1) through (a)(3) of this section.
(1) Person. A person, as used in paragraph (c) of this section, means any inventor or other individual (e.g., an individual to whom an inventor has transferred some rights in the invention) who has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention. An inventor or other individual who has transferred some rights in the invention to one or more parties, or is under an obligation to transfer some rights in the invention to one or more parties, can also qualify for small entity status if all the parties who have had rights in the invention transferred to them also qualify for small entity status either as a person, small business concern, or nonprofit organization under this section.
(2) Small business concern. A small business concern, as used in paragraph (c) of this section, means any business concern that:(i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify for small entity status as a person, small business concern, or nonprofit organization; and
(ii) Meets the size standards set forth in 13 CFR 121.801 through 121.805 to be eligible for reduced patent fees. Questions related to standards for a small business concern may be directed to: Small Business Administration, Size Standards Staff, 409 Third Street, SW., Washington, DC 20416.(3) Nonprofit Organization. A nonprofit organization, as used in paragraph (c) of this section, means any nonprofit organization that:
(i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify as a person, small business concern, or a nonprofit organization; and
(ii) Is either:(A) A university or other institution of higher education located in any country;
(B) An organization of the type described in section 501(c)(3) of the Internal Revenue Code of 19 86 (26 U.S.C. 501(c)(3)) and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a));
(C) Any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of this country (35 U.S.C. 201(i)); or
(D) Any nonprofit organization located in a foreign country which would qualify as a nonprofit organization under paragraphs (a)(3)(ii)(B) of this section or (a)(3)(ii)(C) of this section if it were located in this country.
(4) License to a Federal agency.
(i) For persons under paragraph (a)(1) of this section, a license to the Government resulting from a rights determination under Executive Order 10096 does not constitute a license so as to prohibit claiming small entity status.
(ii) For small business concerns and nonprofit organizations under paragraphs (a)(2) and (a)(3) of this section, a license to a Federal agency resulting from a funding agreement with that agency pursuant to 35 U.S.C. 202(c)(4) does not constitute a license for the purposes of paragraphs (a)(2)(i) and (a)(3)(i) of this section.(5) Security Interest. A security interest does not involve an obligation to transfer rights in the invention for the purposes of paragraphs (a)(1) through (a)(3) of this section unless the security interest is defaulted upon.
*****
I. PERSON
An inventor or other individual who has transferred some rights, or is under an obligation to transfer some rights in the invention to one or more parties, can also qualify for small entity status if all the parties who have had rights in the invention transferred to them also qualify for small entity status either as a person, small business concern, or nonprofit organization.
III. NONPROFIT ORGANIZATIONS
The term “university or other institution of higher education” means an educational institution which:
- admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate,
- is legally authorized within the jurisdiction in which it operates to provide a program of education beyond secondary education,
- provides an educational program for which it awards a bachelor’s degree or provides not less than a 2-year program which is acceptable for full credit toward such a degree,
- is a public or other nonprofit institution, and
- is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time.
Institutions which are strictly research facilities, manufacturing facilities, service organizations, etc., are not intended to be included within the term “other institution of higher education” even though such institutions may perform an educational function or publish the results of their work.
- The USPTO prohibits the claiming of small entity status if the nonprofit organization (a university) has assigned, granted, conveyed, or licensed any rights in the invention to any person, concern, or organization which would not qualify as a person, small business concern, or a nonprofit organization.
Nonprofit organizations also include corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation (limited exceptions may apply and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
IV. LOCATION OF SMALL ENTITY
Small entities may claim reduced fees regardless of the country in which they are located.
V. RIGHTS IN THE INVENTION AND TRANSFER OF RIGHTS
The “rights in the invention” are the rights in the United States. Rights in the invention include the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.
- Therefore, for example, status as a small entity is lost by an inventor who has transferred or has an obligation to transfer a shop right to an employer who could not qualify as a small entity.
Once small entity status is established, fee payments may be made without regard to change in status until the payment of the issue fee is due or a maintenance fee is due.
The notification of loss of entitlement to small entity status must be in the form of a specific written assertion to that extent, rather than only payment of a non-small entity fee.
VI. RIGHTS HELD BY GOVERNMENT ORGANIZATIONS
Government organizations as such, whether domestic or foreign, cannot qualify as nonprofit organizations.
- A government research facility or other government-owned corporation could not qualify.
- Although the Federal government agencies do not qualify as nonprofit organizations for paying reduced fees under the rules, a license to a Federal agency resulting from a funding agreement with the agency will not preclude the proper claiming of small entity status.
A university or other institution of higher education located in any country would qualify, however, as a “nonprofit organization even though it has some government affiliation since such institutions are specifically included.
